President Reagan will reject the pleas of domestic shoe manufacturers for import curbs or tariffs that would protect them from foreign competition, White House sources said today.
"The president believes that it would be a bad precedent for free international trade to give the shoe industry a special break," a White House official said.
The decision, reflecting Reagan's long-held free trade views, defies a rising call for protectionism in Congress and could have political consequences extending far beyond the debate about lost jobs in the shoe industry versus continued benefits for U.S. consumers.
Growing concern about the effects of foreign competition and a soaring U.S. trade deficit are likely to push trade issues high on the congressional agenda this fall and put the White House under increasing pressure to impose protectionist measures.
Reagan's decision, scheduled to be announced at midweek, will turn down an import-relief petition from U.S. shoe manufacturers, who have shut down two-thirds of their plants in the last 15 years.
Imports now account for 76 percent of the U.S. shoe market, compared with 22 percent in 1968, according to government figures.
The plight of the shoe industry, which has been slow to modernize, prompted President Jimmy Carter in 1977 to impose temporary quotas on shoes imported from Korea and Taiwan.
They were allowed to lapse by Reagan in 1981.
This year the shoe industry's request for relief, the forerunner of some 300 protectionist bills that have been introduced in Congress, touched off a debate within the administration that the president's advisers proved incapable of resolving.
U.S. Trade Representative Clayton Yeutter and White House political adviser Edward J. Rollins, who favored limited protective measures, warned that rejection of any aid to the shoe industry could further encourage protectionist sentiment in Congress.
Officials of the Commerce, Labor and Agriculture departments also favored limited protection for domestic concerns.
But Secretary of State George P. Shultz and Treasury Secretary James A. Baker III, supported by the Office of Management and Budget, opposed any protective measures and called instead for action that would broaden U.S. access to foreign markets.
White House sources said Reagan will pledge such action when he announces his rejection of the quotas and will instruct Yeutter, under a provision of the Trade Act of 1974, to monitor foreign governments with a view to negotiating the end to unfair trading practices and broadening U.S. access to markets in the shoe-exporting countries.
One official acknowledged, however, that this is likely to be seen as little more than a "fig leaf" by the shoe industry and protectionist-minded legislators.
Advocates of protectionism for the shoe industry won a victory in June when the U.S. International Trade Commission, an independent federal agency, recommended imposition of quotas that would have limited imports to 60 percent of the market for five years.
The commission majority heeded the pleas of industry spokesmen such as George Langstaff, president of Footwear Industries of America, who said that "the domestic footware industry desperately needs five years of quotas to survive."
But shoe retailers such as Peter Magione, president of the Footwear Retailers of America, said the restrictions would cost the public $3 billion a year and fall hardest on low-income people, the biggest customers of low-priced shoes.
Susan W. Liebeler, who dissented in the commission's vote, said the quotas would save 26,000 U.S. jobs at an annual cost to consumers of $1.28 billion, three times the wages of the workers whose jobs would be lost.
The commission recommendation was widely criticized as too protectionist, and Yeutter and a Cabinet council headed by Baker developed an alternative plan for imposing an average 30 percent tariff to be phased out over five years.
Reagan rejected this, too, said an official because he "just didn't buy the argument that we should accept a small dose of protectionism to head off a larger injection."
The president continued his 23-day California vacation in ideal weather today at his mountaintop ranch. On Saturday, in an interview with Washington Broadcast News, he reiterated an oft-expressed statement that the United States has no hostile intentions toward the Soviet Union.
This point was made recently in a White House statement commemorating the end of World War II. Reagan said Saturday that he expects to present "evidence" to Soviet leader Mikhail Gorbachev at the Geneva summit talks in November that the United States has no aggressive intentions.
The president's comments were made in a telephone interview from his ranch that the White House will formally release Monday. Portions of the interview were published today by The New York Times.